Artists Resale Right


The Irish Visual Artists’ Rights Organisation (IVARO) collects and distributes the artist’s resale right on behalf of its members. More info on www.ivaro.ie

Visual Artists Ireland was instrumental in the establishment of IVARO along with Irish Copyright Licensing Agency (ICLA) and the Copyright Association of Ireland (CAI)

The work that Visual Artists Ireland has undertaken in the past number of years in relation to the Artists Resale Right is channelled through IVARO.

See the drop down menu for more information on the Resale Right, the Directive, our position and the campaign. See the main menu for more information on IVARO.


Introduction

The principle of the Artists Resale Right is that it allows visual artists and their estates to a share in the increased value of their artworks whenever they are resold through auction or other public sale.

The Artists Resale Right or Droit de Suit (Right to Follow) is a type of copyright that has been provided for in most EU states for many years.

Ireland and the United Kingdom were an exception as the artists resale right was not provided for by legislation. However, an EU Directive was passed in 2001 which obliged all EU states to introduce the scheme, along broadly similar lines, by 2006. Currently the right is in place in Ireland under temporary regulations.

While the EU directive sets some parameters on how the scheme should work it also gives individual states the freedom to make decisions over certain aspects of how the scheme might operate. It is in regard to these issues that the current campaign is centred.

Visual Artists Ireland very much welcomes the introduction of the scheme for the benefit of Irish artists and their heirs.

Background

In accordance with an EU Directive, Ireland introduced the Artists Resale Right in 2006. This is a hugely important new copyright for Irish artists and visual creators. Artists like any other ‘authors’, are entitled to the protection of their work under the law of copyright and related rights. The resale right entitles artists to a certain percentage of the resale price of their works whenever they are resold by commercial dealers or auctioneers, during their lives and for 70 years after death.   It is also known as droit de suite (‘follow-up right’), which was the name given to the first scheme of this kind in France in the 1920s. It was originally designed to aid the families of artists who were killed while serving with the armed forces during the first World War. Widows and orphans were often left destitute while the works of their husbands/fathers were being resold for vast sums of money. One well known account describes how the children of Jean-Francois Millet had to sell flowers on the streets of Paris while their father’s painting ‘The Angelus’ sold for 1 million francs, a more than 1000% increase on the price which he sold it for.

Belgium enacted droit de suite soon after France and since then most other European countries along with California have introduced their own version.  In jurisdictions without droit de suite the purchaser of an original artwork can resell it, often at an inflated price, without the artist benefiting. As can subsequent sellers, each making a profit off the artists’ creativity and labour. The resale right recognises that artists may have had to sell their works cheaply when young and unknown, and should be able to share in the profits made by art dealers as their work changes hands at ever higher prices.  The right, it is argued, would put artists on a par with writers and composers who may continue to earn royalties on the use of their works throughout their term of copyright.  The possibility of sharing in the rising value of their work through resale royalties is an added incentive for artists to create and to improve their reputation.

It is one of the biggest successes in recent years for authors because it was reached despite strong lobbying campaigns by art market professionals.

The Directive

The current EU Directive arose out of concerns over distortions in the EU art market arising from the inconsistent ways in which the resale right was being applied in Member States and also from the fact that four member states, including Ireland, did not have the resale right in place at all.  The European Commission proposed the Directive to harmonise droit de suite in 1996 and it was adopted by the Council in July 2001.  EU Directive 2001/84/EC cams into effect across the European Union on 1 January 2006. From then, the resale right must be adopted by all member states and applied in a harmonious fashion.

Each time an artist’s work is resold by an art dealer or auction house the artist is due a certain percentage of the resale price, known as the royalty.  The royalty that the artist receives is based on a sliding scale, which is laid out in the following table:

4 % for the portion of the sale price up to € 50,000
3 % for the portion of the sale price from € 50,000.01 to € 200,000
1 % for the portion of the sale price from € 200,000.01 to € 350,000
0.5 % for the portion of the sale price from € 350,000.01 to € 500,000
0.25 % for the portion of the sale price exceeding € 500,000
The amount of royalty may not exceed € 12,500

Source: Article 4 of EU Directive 2001/84/EC


Timescale for implementation

The law came into force in January 2006, so far as living artists are concerned and as late as 2012 for the heirs of artists who have died less than 70 years previously.  The option to delay the right for deceased artists is highly unusual and was included in the Directive to appease the UK art market profession, which have fiercely lobbied against the resale right.   Only countries which have not had the resale right before can chose to avail of this option.

Inalienability of the resale right

The artist’s resale right will be ‘inalienable’, meaning that it can never be transferred away by the artist. This protects artists from the vulnerable position that many writers and performers find themselves in when a publisher or production company demands that they assign their copyright or waive their moral rights in a work.

Works of art to which the resale right relates

‘Original works of art’ is the term used by the Directive to describe the works that will attract the resale right. The Directive goes on to explain that this would include ‘graphic or plastic art such as pictures, collages, paintings, drawings, engraving, prints, lithographs, sculptures, tapestries, ceramics, glassware and photographs, provided they are made by the artist himself or are copies considered to be original works of art’.

Threshold

Member States can elect to set a minimum resale price that will attract the royalty payment, but this cannot be more than €3,000.

Payment of the royalty

It is only sales involving an ‘art market professional’ such as an agent or auction house which will be eligible for resale royalties. The seller will be the payer of the royalty but Member States may elect to require the purchaser or dealer also to have that responsibility.

Persons entitled to receive royalties

Artists will be entitled to the royalty payment, or their heirs for 70 years after death. However, Member States may elect to legislate for a collecting society to manage the royalties, collecting and distributing them on behalf of artists. Collective management is the most common international approach and the most likely one to be adopted in Ireland.

Right to obtain information

Artists, or their elected representative, will be entitled to require any market professional (sellers, buyers, intermediaries, salesrooms, art galleries and art dealers) to provide information needed to secure payment of royalties. This right to information will last for up to three years after the resale.

The Intellectual Property Unit (IPU) of the Department of Enterprise, Trade and Employment has the responsibility for drafting the Irish legislation.  The IPU have a considerable amount of freedom in how they implement certain elements of the Directive. The ways in which the IPU interpret the Directive may have a significant impact on the benefit of the resale right for Irish artists.

Our Position

Member States were given the freedom to make decisions over certain aspects of how the resale royalty scheme might operate.  Irish legislators implemented the regulations without addressing the various options that were available to them.  However there was a committment to adress this in forthcoming legislation.  It is very important that the new legislation is framed in such a way that the right gives benefit to as many visual artists as possible without causing undue disruption to the art trade.

Rate
Member States are allowed to set a royalty rate of 5% to the lowest band (€0 – €50,000) instead of the pre-set 4%. Applying a higher rate to the lowest band will encourage artists whose work falls into this bracket and create a further incentive for them to continue producing work. This option was included in the Directive specifically to encourage young and upcoming artists. It will give a slight increase to the modest assistance which the royalties can provide for emerging artists.

It is our opinion that Ireland should set a rate of 5% to the lowest band.

Threshold
For a work of art to be eligible for resale royalties it must sell for a minimum price.  Each Member State is allowed to set this minimum price threshold, however it cannot exceed €3000. Ireland has set the threshold at €3000, which is the highest in the EU. A lower threshold of €1000 is considered to be a more suitable one for the Irish market. An artwork that resells for €1000 will produce a resale royalty of at least €40 (if 5% is applied to the lowest band this increases to €50).  Based on average administration costs of 18% in Europe this leaves at least  €32.80 for the artist.  A small sum but as many artists have indicated it is the principle that is important. According to the research of artprice.com – 49% of all catalogued sales are concluded at prices at or below €1000 (Artprice.com, February 2003). A threshold three times as high will exclude the resale of works of young and emerging artists and that of graphic artists and photographers. Analysis of figures from the Price Guide to Irish Art 2004 shows that if the threshold is dropped from €3000 to €1000 then 45% more artworks will qualify for royalties. In the UK, the Design and Artists Copyright Society (DACS) have calculated that if the minimum threshold is lowered from €3000 to €1000 then 92% more works will qualify. (DACS, Submission on the Resale Right 2005: 13)

It is our opinion that Ireland should lower the threshold to €1000.

Deceased Artists
Countries that have not had droit de suite in the past, such as Ireland and the UK, are allowed to delay the implementation of the right for the heirs of deceased artists until 2012 if they so wish.

Despite numerous submissions and a vigorous campaign from IVARO, Irish legislators chose to adopt the option to exclude the works of deceased artists.  The resale right was originally intended to benefit the families of deceased artists.  This exception is in conflict with the EU Directive 93/98 which harmonised the term of protection on 70 years post mortem autoris and with the Berne Convention which set a minimum standard term of protection of 50 years after the author’s death.

It is our opinion that the right should be introduced fully for living and recently deceased artists immediatley.

Payment of the royalty
The seller will be the payer of the royalty but Member States may elect to require the purchaser or dealer also to have that responsibility.

It is our opinion that the seller and dealer should share the responsibility for payment jointly.

Royalty Collection
Member states must decide who is in charge of collecting the royalties, that is, artists individually or through some form of collective management on behalf of artists. In the vast majority of countries that already have droit de suite the royalties are collected and distributed to artists by a collecting society. This way artists and art market professionals, both at home and abroad, have one point of contact. Having a centralised collecting body minimises administrative and other collection costs, benefits from economies of scale and ensures greater compliance from the art trade. It relieves individual artists from the burden of monitoring all sales and chasing up payments from the art market.

Visual Artists Irleand strongly supports collective management of resale royalties by a collecting society since we believe that this best serves the interests of both artists and art market professionals. A single artist is generally not able to avail himself or herself of the necessary legal means to enforce a claim against a reluctant art dealer, auctioneer or gallery. By way of contrast, collecting societies have contacts in the contemporary art market and generally command sufficient influence to enforce claims, if needs be, through legal mechanisms. The enforcement of claims by a collecting agency also offers an advantage to the art trade, as vendors need only balance accounts with the collecting agency annually, rather than settling each claim individually.

A collecting society would belong to a network or umbrella organisation such as EVA (European Visual Artists) to enable reciprocal exchanges of rights and funds for artists internationally, and at low cost through common administrative systems.

It is our opinion that an artists collecting society should be given the responsibility for collecting and distributing the resale royalties.

The Campaign

Visual Artists Ireland worked with the ICLA and the CAI to establish the Irish Visual Artists Rights Organisation (IVARO).  IVARO’s principle purpose is to act as an agent for its artist members, collecting royalties for the “secondary uses” of their work.  When a visual work is created, the artist automatically owns the copyright in it. The artist is entitled (even after the sale of the original) to receive a royalty every time the work is copied for any purpose: by publication in a book, by broadcasting, by being reproduced as a print, etc.

The recent arrival of the resale right has underlined the pressing need for an artists collecting society in Ireland. Seed capital for the initial set up was provided by ICLA who along with Visual Artists Ireland have provided part-time staffing for the organisation.  It is a legally constituted not-for-profit organisation with membership open to all visual creators. Visual Artists Ireland believes that such an organisation would be best suited to managing the administration of the resale scheme.

IVARO’s initial objective was to make its position on the resale right known to the Arts Council and relevant Ministers, government departments and legislators.  A number of submissions were made emphasising the importance of the resale right to Irish artists and the most appropriate ways of introducing it.

Have Your Say

If you are interested in assisting with this campaign please consider writing a letter to your TD or the Minister for the Department of Enterprise Trade and Innovation.  You could use the letter below or write your own.

Dear Minister
The artists’ resale right was always intended to benefit the heirs of an artist after his or her death. It creates equality between visual artists and the creators of other copyright works – all of whom are entitled to a royalty for 70 years after death.
As the Irish Visual Artists’ Rights Organisation is now successfully collecting the ARR on behalf of Irish artists, there is no reason why the government should seek to further postpone the granting of the right to heirs.
Apart from extending the ARR to artists’ heirs, can I ask that that you support Irish artists by bringing forward legislation in which the threshold for payment of the ARR is reduced to a maximum of 1,000, so that a greater number of artists can benefit from this right.
Signed:

Visual artist (Your name)
Address: (Your address)